The Financial Times reports that Roberto Colaninno, the Italian financier bidding for Fiat, has told the company that his turnaround plan would reverse massive losses in its car division and generate operating profits of 7 to 9 per cent of sales within five years.
Colaninno hopes to inject about nine billion euros into Fiat Auto. He would become chief executive and bring in new management in an attempt to reverse the ailing unit’s worsening financial crisis. The Colaninno plan is reportedly opposed by the controlling Agnelli family, a major barrier to its approval when the board meets at the end of February.
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Colaninno has said that his plan can only work if it was supported by Fiat, its banks, the Agnelli family, other shareholders and General Motors.
Under Colaninno’s rescue plan negotiations with GM would start in an attempt to persuade GM to invest up to two billion euros toward the recapitalisation of the Fiat Auto division. But Fiat’s ‘put’ option, which could force GM to acquire the remaining 80% of Fiat Auto, would be cancelled under a deal.
